Consumer Price Inflation: Transient Trend or Enduring Menace?
We discuss prospects for CPI over the short, medium, and long-term
Where is CPI inflation headed? Is it accelerating, stabilizing, or diminishing? I try to answer the question thoughtfully, looking at the short, medium, and long term. You might be surprised to find out why I think stubbornly high increases in the CPI are ‘baked in” for years to come.
I recorded this podcast for the ARC-UK YouTube network on Friday, May 12, 2023. A lightly-edited transcript is attached for readers or those who want to examine the graphical data more closely. You can enjoy it at 1.2x.
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Thanks, and don’t forget it’s Mother’s Day!
HardmoneyJim, May 14, 2023
Thank you, Jim, for the latest episode. It spurred some questions that perhaps could be discussed in a future episode.
1. I understand your steak/hamburger analogy as it relates to CPI. When I think, though, of many categories it seems like each decade things get better and better. Examples would be cars, phones, televisions. I wonder how that factors into CPI, if at all. In other words, for things that aren't food, it seems by analogy like we are now getting aged ribeye when two decades ago we were getting hamburgers.
2. Perhaps a topic for a different podcast... You talk often about financial repression as it relates to the government, classes in society and the individual. I would be curious what happens to blue states during financial repression?
3. Previously you have mentioned a good target for gold holdings as 10% of the investment portfolio. That feels low (inconsistent almost) with your world view as it relates to the dollar, i.e., upward pressure on gold, downward pressure on dollar.
4. Perhaps related to 3 above... should individual investors be swearing off treasuries completely and focus on other things, including gold? If not, where would you cap treasury holdings?
5. Do you see a possibility of the government outlawing or trying to seize gold in times of financial repression?
6. Right now gold is trading WAY above spot price when it comes to coins/bars. Silver not so much. Should silver be part of the portfolio, and if so at what level? Or do think of silver as basically in the same 10% basket that is gold?
Thank you much!